Question

Project Marvel is a five-year project. The project has a total cash inflow of $350,000. The present value of such inflows is $275,000. The project requires an initial investment of $200,000 and additional working capital of $25,000. What is the net present value of the project?

a.$0
b.$50,000
c.($50,000)
d.($250,000)

Answer 1

The net present value of the project is $ 50,000

Step-by-step explanation:

Present value of cash inflows 275,000

Less: Initial investment 200,000

Less: Workin capital needed 25,000

Net present value 50,000

The net present value of the project is $ 50,000